Texas requires employers to pay non-exempt employees 1.5 times their regular hourly rate for any hours worked beyond 40 in a single workweek. There’s no separate state overtime law—Texas follows the federal Fair Labor Standards Act (FLSA), and unlike some states, there’s no daily overtime threshold.
Getting overtime wrong can lead to back-pay claims, lawsuits, and penalties that far exceed what you would have owed in the first place. This guide covers when overtime kicks in, how to calculate it for tipped employees, who qualifies as exempt, and the common mistakes that get restaurant operators in trouble.
What is overtime pay in Texas?
Texas follows federal overtime law under the Fair Labor Standards Act (FLSA). That means employers pay non-exempt employees 1.5 times their regular hourly rate for any hours worked beyond 40 in a single workweek. There’s no separate state overtime law in Texas, and unlike California, there’s no daily overtime threshold either.
Here’s what that looks like in practice:
- Overtime rate: 1.5x your regular hourly rate (time and a half)
- Trigger: Hours worked beyond 40 in one workweek
- Governing law: Fair Labor Standards Act (FLSA)
- No daily limit: Texas doesn’t cap daily hours for employees 16 and older
So your line cook could work a 12-hour shift without triggering overtime, as long as their weekly total stays at or below 40 hours.
When does overtime kick in for Texas employees?
The 40-hour mark is what matters. Once a non-exempt employee crosses that threshold in a single workweek, every additional hour earns overtime pay.
Overtime starts after 40 hours per week
This is weekly, not daily. Your line cook could work four 10-hour shifts (40 hours total) and not earn a penny of overtime. But if they pick up a fifth shift, even just four hours, those four hours are overtime.
How Texas employers define a workweek
A workweek is any fixed, recurring period of 168 consecutive hours, or seven 24-hour days. You get to choose when it starts: Sunday at midnight, Monday at 6 a.m., whatever works for your operation. Once you set it, keep it consistent. The workweek doesn’t have to match your pay period or the calendar week.
Can employers average hours across two weeks?
No. Each workweek stands alone. If your server works 50 hours one week and 30 the next, you still owe overtime for those 10 extra hours in week one. You can’t average them out to 40 hours per week and call it even.
How to calculate overtime pay in Texas
The math is straightforward once you know the formula.
Time and a half calculation
Take the employee’s regular hourly rate and multiply it by 1.5. That’s the overtime rate. Then multiply the overtime rate by the number of overtime hours worked.
For example, if someone earns $15/hour and works 45 hours in a week:
- Regular pay: 40 hours × $15 = $600
- Overtime pay: 5 hours × $22.50 ($15 × 1.5) = $112.50
- Total: $712.50
Overtime calculation for tipped restaurant employees
This is where restaurants often trip up. If you’re using the tip credit to pay servers below minimum wage, you still calculate overtime based on the full federal minimum wage, not the lower tipped wage.
| Employee Type | Overtime Calculation Basis |
|---|---|
| Regular hourly employee | Actual hourly rate × 1.5 |
| Tipped employee (using tip credit) | Full minimum wage × 1.5 |
So even if you’re paying a server $2.13/hour plus tips, their overtime rate is based on $7.25/hour (the federal minimum), not $2.13. Check the Department of Labor for current Texas minimum wage rates.
Also read: How to reduce restaurant overtime
The previous threshold remains in effect, though it’s worth checking the DOL website for any updates.
Why job duties matter more than job title
Calling someone an “Assistant Manager” doesn’t make them exempt. What matters is what they actually do during their shifts. If your assistant manager spends 80% of their time expediting orders, running food, and covering server sections, and only 20% on actual management tasks, they likely still qualify for overtime.
Download: Manager job description template
Tip: Review what your salaried employees actually do, not just their job descriptions. The duties test looks at real-world responsibilities.
Do part-time employees get overtime in Texas?
Yes. Part-time status doesn’t affect overtime eligibility. If a part-time employee works more than 40 hours in a workweek, they earn overtime for those extra hours, same as anyone else.
Can employers require mandatory overtime in Texas?
Texas doesn’t limit how many hours an adult employee can work. There’s no cap on daily or weekly hours for employees 16 and older.
Texas law on required overtime hours
Employers can legally require employees to work overtime. The catch? They still have to pay overtime rates for any hours over 40. Requiring the hours is legal; not paying for them isn’t.
Can employees refuse mandatory overtime?
Generally, yes, but there may be consequences. Texas is an at-will employment state, meaning employers can discipline or terminate employees for refusing overtime (with some exceptions for safety concerns or protected situations). It’s not illegal to require overtime, but it’s also not illegal for an employee to decline and face the employment consequences.
Is extra pay required for weekends and holidays in Texas?
No state or federal law requires premium pay for weekends, nights, or holidays. Overtime only kicks in based on total weekly hours, not when those hours are worked. If your team works Thanksgiving, you’re not legally required to pay extra unless they exceed 40 hours that week. Any holiday or weekend premium is voluntary employer policy.
What counts as hours worked for overtime purposes
This matters more than you might think, especially in restaurants where pre-shift prep and post-shift cleanup are part of the routine.
Training time
If training is required by the employer, happens during work hours, and is job-related, it counts as hours worked. Mandatory pre-shift meetings, food safety certifications, new menu training: all of it goes toward the 40-hour threshold.
Meal and rest breaks
Short breaks (under 20 minutes) typically count as work time. Meal breaks of 30 minutes or longer, where the employee is completely relieved of duties, can be unpaid. But if your server is eating while answering the phone or watching the door, that’s work time.
Pre-shift and post-shift work
Time spent on required activities counts. Setting up stations, attending pre-shift meetings, rolling silverware, cleaning after close: all of it. “Off the clock” work is one of the most common overtime violations in restaurants.
Common Texas overtime violations restaurant operators avoid
Here are the mistakes that lead to wage claims and back-pay lawsuits.
Misclassifying employees as exempt
Calling a shift lead or kitchen supervisor “exempt” when their actual duties don’t qualify is a common error. Focus on what they do, not what you call them.
Not paying for off-the-clock work
Requiring or allowing employees to work before clocking in or after clocking out violates FLSA. This includes side work, prep, and closing duties. If they’re working, they’re on the clock.
Paying straight time instead of time and a half
Some employers mistakenly pay the regular rate for overtime hours. Even if the extra hours were unauthorized, you still owe time and a half.
Misclassifying workers as independent contractors
Workers who are controlled like employees, with set schedules, required uniforms, and specific duties, are employees for overtime purposes, regardless of what their paperwork says.
Overtime record-keeping requirements for Texas employers
The FLSA requires employers to maintain accurate time records. If there’s ever a dispute, you’ll want documentation.
Records to keep for each employee:
- Employee identification and contact information
- Hours worked each day and total hours each workweek
- Regular hourly rate
- Total overtime earnings per week
- Pay dates and pay periods covered
Retain records for at least three years. If you’re tracking hours manually with spreadsheets or paper timesheets, consider whether that system is actually capturing accurate data, or just what employees remember to write down.
How restaurants stay compliant with Texas overtime laws
Compliance comes down to three things: accurate time tracking, proper employee classification, and regular audits of your pay practices.
The manual approach, using spreadsheets, paper timesheets, and a calculator, works, but it’s time-consuming and error-prone. Scheduling software like 7shifts tracks hours in real-time as you build your schedule, so you can see when employees are approaching 40 hours before overtime kicks in.
Start a free trial of 7shifts to see how real-time hour tracking works.
Expert take: The importance of overtime compliance
Corey Pollard, Workers’ Compensation Lawyer: “I would put overtime compliance on the same level as food safety for any restaurant owner. It’s not the most glamorous aspect of the business, but it can turn into a disaster in no time. One area where it is particularly important for restaurants is with scheduling. A server can take an additional shift to dinner, a line cook can work late due to a staff member’s absence, or a manager can fill in during a busy time and not document the hours correctly. Those little bits of time can become unpaid overtime and unpaid overtime can become back pay, penalties, lawyer bills, and ruined reputation.
On the other side of the legal profession, I have witnessed the speed with which an issue has escalated in the workplace if records are missing. Time records, job duties, incident reports and payroll records are frequently crucial evidence in workers’ compensation cases. The same applies to overtime. Obviously, if the restaurant is not able to easily demonstrate when a worker worked, what he/she was paid, and how overtime was computed, they are already at a disadvantage. The problem is, state regulations may differ from the federal government’s rules. There are some states that have daily overtime rules, meal and rest break requirements or special rules for tipped employees. There could be two different compliance habits needed for a restaurant with a presence in two states. It is not sufficient to copy the policy from elsewhere.
My tips are very simple. Inform the train managers not to “fix” labor costs through ‘off the clock’ work. Review schedules prior to overtime, not after payroll closes. Maintain proper time records, including pre-shift set-up/close down work. Verify that tipped employees, assistant managers and kitchen staff are classified properly. The duties of the job are usually more important than a title in determining whether a person is exempt from overtime. Restaurant profit margins are slim and they monitor each hour. However, overtime compliance is more cost effective than a wage claim. The same applies as having a non-slip mat in the kitchen: pay people properly from the get-go. It might sound simple but it helps to prevent an injury that can affect anyone.”
FAQs about Texas overtime laws
Does paid time off count toward overtime hours in Texas?
No. Only actual hours worked count toward the 40-hour overtime threshold. PTO, sick time, vacation, and holidays don’t count as hours worked for overtime calculation purposes.
Is overtime pay taxed differently than regular pay in Texas?
Texas has no state income tax, so overtime isn’t taxed at the state level. Federal taxes apply to overtime earnings the same as regular wages. It might push you into a higher withholding bracket for that paycheck, but the actual tax rate is the same.
Can Texas employers offer comp time instead of overtime pay?
Only public sector employers can offer compensatory time off instead of cash overtime pay. Private employers, including restaurants, have to pay overtime in cash. Comp time isn’t a legal substitute.
What are the penalties for not paying overtime in Texas?
Employers may owe back wages, liquidated damages (potentially double the unpaid wages), and attorney’s fees. Employees can file claims with the Department of Labor or pursue private lawsuits.
Is there a maximum number of hours an employee can work in Texas?
No. Texas law doesn’t limit the number of hours an adult employee can work per day or per week. Employers simply have to pay overtime for hours exceeding 40 per workweek.
Also read:
Rebecca Hebert, Sales Development Representative
Rebecca Hebert
Sales Development Representative
Rebecca Hebert is a former restaurant industry professional with nearly 20 years of hands-on experience leading teams in fast-paced hospitality environments. Rebecca brings that firsthand knowledge to the tech side of the industry, helping restaurants streamline their operations with purpose-built workforce management solutions. As an active contributor to expansion efforts, she’s passionate about empowering restaurateurs with tools that genuinely support their day-to-day operations.
